Counties’ wage bill doubles after two years of hiring spree

Governors have gone on a hiring spree over the last two years nearly doubling the county governments’ wage bill in what has derailed efforts to curb the ballooning public service salaries.

Official data released Tuesday show that nearly 16,000 workers have been added to the counties payrolls over the last two years with 11,000 of those hired last year.

This is in contrast to the national government, which cut its workforce by 3,200 last year to 177,000 informed by a hiring freeze in non-essential departments.

“There seems to be a scenario of hiring new staff and not being able to get rid of existing staff,” Jason Lakin, an economist with the International Budget Partnership said.

“If the existing staff cannot be retooled then hiring more staff is unfortunately increasing the wage bill but we are not getting the value for money we would like. This reflects the failure of the CARPS (Capacity Assessment and Rationalisation of the Public Service) process.”

The government has frozen pay increases for national government workers to help rein in public sector salaries to free up cash for projects like building roads that ultimately create jobs. 

Kenya’s public service wage bill stands at slightly above 50 per cent of annual government tax revenue. The International Monetary Fund puts the global benchmark at about 35 per cent.

The wage bill in the devolved units, however, nearly doubled in that period, jumping from Sh64.2 billion when the governors took office in 2013 to Sh116.4 in the current financial year.

County governments have previously argued that the hiring was necessary as most of the employees they inherited from the defunct local authorities were unskilled hence the need to employ technical people.

READ: Controller of Budget raises red flag over high county wage bill

The 47 devolved units have also emerged as a more lucrative employer offering workers better terms compared to the national government and private sector.

The Economic Survey 2016 shows that on average, the county workers earned Sh53,600 per month ahead of national government civil servants who earned an average Sh42,300 and private sector employees (Sh49,600).

Kenya is struggling to reduce a bloated wage bill that is eating into development spending and it is expected that the hiring freeze and rising revenues will eventually see the State stabilise the national government expenditure.

The national government is spending about 33 per cent of its total revenues to pay its workers and county governments are doing 40 per cent, says Controller of Budget Agnes Odhiambo.

In her 2014/15 report, Ms Odhiambo asked that counties peg their personnel costs to their revenues as demanded by the Public Finance Management (PFM) Act.

The PFM Act demands that county assemblies pass regulations setting a ceiling on salaries as a share of their revenues, what counties have ignored.

In the current financial year ending June, the devolved governments were allocated Sh259.7 billion compared to Sh198.7 when they came into office.